No. In a POA you nominate someone specifically but you do not need to name anyone in your living will. Both take effect in the case of incapacity. You can write your living will as part of your POA; it only outlines your health treatment, and personal care wishes in near-death matters. If you have written a living will (an advance directive), then the POA is legally obligated to follow your wishes if it applies to your situation. If you did not prepare a living will your POA will act in what they believe to be your best wishes.
Tip: It is a good idea to run this document past your physician, to get an assessment to see if your instructions make sense, or are clear enough medically.
Three reasons you want to prepare a living will:
- To keep control of your health care if you become incapacitated.
- To take the responsibility and weight off the shoulders of your loved ones when they have to trigger tough decisions supporting your end-of-life wishes regarding medical interventions.
- To increase communication with your family on a topic that can dramatically affect you.
Tips for business owners:
- You can grant a POA for your business property to someone who knows about your business, and another POA to a separate person to manage your personal property. Be careful here. If you just set up a new POA for your business property or your business shares, it will automatically revoke your POA for personal property, leaving nobody in control of your personal property if you become incapacitated. You need to state in the new POA that the POA for your business shares does not revoke your pre-existing personal property POA.
- If you have three kids and the one with the POA is taking over your business, the others may not know if the POA is up front on debts or financing of the business. You can ensure that the POA discloses to your other children and gives them the authority to get an accounting from the POA.
Tip: If one person is not cut out to be both POA on financial and personal affairs, you can nominate a separate person for each document.
Final Tip: Don’t choose someone who will be in a conflict of interest. The beneficiary to your will may choose to spend less money on your care if it means more money for them in the inheritance.
Each POA should cost approximately no more than $200, but if your family has to go to court, the costs can run in excess of $10,000. Giving someone a POA is a very serious matter. It is a good idea to consult a lawyer or other expert advisors before preparing your POAs.
Your Executor: The Person Who Keeps It All Together
The executor plays an important role in settling your estate. They can be the difference between a properly settled will and a disaster. But most people don’t want the job and many people can’t handle it and have no experience doing it. Be aware that even though the executor gets paid from your estate to take on their role, it is hard work and takes time. It can take a long time depending on your affairs. The executor can be personally liable for dispersing an estate too quickly without the proper consent and releases of potential claimants to the estate. They can also be personally liable for interest if the estate takes more than one year to settle.
A recent BMO Leger poll found that those chosen to be executors often ran into roadblocks when trying to settle an estate. Of those roadblocks, 26 percent were legal, 31 percent were emotional and 47 percent had administrative complications.
Don’t let someone discover they are your executor after you die. Don’t laugh, it happens too often. Speak to the person you want to settle your affairs. Find out if they will do it. If not and your will does not name an alternative, your bills or taxes won’t be paid and issues affecting your investments or business won’t be addressed until your family agrees on an executor.
Five things to consider when appointing an executor:
- If it is going to be more than one, choose an odd number. That way if there is an impasse in the decisions the third will be the tie-breaking vote.
- If choosing a non-family executor, consider someone who is a generation younger than you. You want them to be able to properly perform their duties when the time comes.
- Have you named a successor executor if your first choice cannot or chooses not to act?
- Do they understand their role and what they are responsible for?
- Have you prepared not just a regular, but an exceptional executor kit? If you don’t know what a proper executor kit should contain, I have an exceptional executor kit that not only has all the financial aspects that need to be in every kit, but also a groundbreaking section on personal matters that you need to know. Visit www.TheFinancialToolboxBook.com to get your free copy.
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